Very little information exists from large population-based studies on patterns of psychoactive drug and other health care use by chronically mentally ill (CMI) in the community. Data are needed on the impacts of increasing cost-containment regulations on inpatient and outpatient utilization, costs, and quality of care provided to these patients. The proposed research will make use of a natural experiment of a drug prescription limit occurring in New Hampshire Medicaid, which sharply reduced use of several essential drugs. Forty-eight months of patient-level data on all medication use, health and institutional care, and patient background characteristics for the total CMI Medicaid populations in New Hampshire and New Jersey will be linked with state hospital and community mental health center data. The investigation will focus on a cohort of ~1,100 CMI in NH (the study state) and a comparison cohort of 10,000 patients in NJ with diagnoses of schizophrenia or other psychoses. Using time-series analysis with comparison series, the following hypotheses will be tested: 1. The reimbursement limit will be associated with a sharp reduction in average monthly dose of antipsychotic agents received by the above cohort. 2. Interruptions in antipsychotic drug use will be associated with increased use of other health services. 3. The rate of relinguishment of suboptimal psychoactive therapies will be greater than for effective neuroleptic drugs. The project will also define the health care utilization patterns of both CMI cohorts, and assess the economic implications of reducing access to relatively inexpensive, but effective agents in this population.